tv Fast Money Halftime Report CNBC December 23, 2013 12:00pm-1:01pm EST
important to note as we get into a new year. we talk about the long-term unemployed and those receiving federal benefits. >> lost in the debate about the stock market and the fed is the much more important debate about whether or not the fed is worsening the income inequality. >> as if they don't have enough to worry about. >> dan greenhouse. scott wapner and the halftime. >> thanks so much. what we're following today, apple breakout, will the stock's second half surge continue, now that china mobile's officially on board. bourbon boom, holiday cocktails and trading biggest names in the business with an entertainment expert. they have one of those. here's in the house mixing it up. the markets which are coming off their best week in some three months. heading higher today. the dow on track for its best percentage gain since 2003. with 2014 now just a week away, what is your best play to kick off the new year? it's halftime. let's play the action.
josh brown, what's the best strategy here? >> i think for new year, last thing you want to do is emphasize in your portfolio anything that's been the runaway leader for last -- for the past year. i think people looking at backward performance measures and small caps in the u.s. and overweighting that are probably making a mistake. that being said, you don't want to be a knee-jerk contrarian either. there are seriously damaged sectors that probably won't recover because the calendar rolls over. i'm looking at emerging market bounds, gold miners. it might be too cute to say, hey, look what didn't work this year, they're due. focus on fundamentals. and if you can find something that's gotten too oversold but news is not bad, that might be a good place to start allocating. >> looking for a good year in 2014? >> i am. energy's a good shot. a serial disappointment this year. but that's where value is, that's probably where the people
skate toward as they realize a global economy needs more energy, not less. >> the thought here is, if you have a great year you're going to have a good year that follows. history would suggest that. we are looking at four, five different years where you've had 20-plus percentage gain in the s&p 500 and what happened next. in '96, 20% gain. '97 you had 31. '97, a 31. in '98, 26. in '595, 33. >> economic data is supportive of higher markets. look at last week, we had pretty good numbers in the u.s., industrial production, productivity, gdp. today the chicago fed numbers, those were very good in terms of sales and orders and productivity. so i think the u.s. continues to improve and this is why we saw the taper last week, kind of a surprise. in terms of just the timing. but i do think you're going to continue to see better data
here. the theme for where we are positioned is international growth. tilt the portfolio more international next year because they're behind where we are. so, i do think you're going to see better data in europe, certainly japan. i think china will stabilize at 7%, you want to be in industrials and tech and overweight those groups. >> people too optimistic? everybody's looking for new good year in the market, give or take a voice or two who are out there. >> i don't think year too optimistic here, scott. you touched on it, after a strong year like this, you get a strong following year. one thing about 2014, that i think is set in stone, it's not as easy as it was in 2013. a lot of people, the bar is set higher for next year than this year. i want to look at financials. i want to see they're able to continue to lead us. i also want to look at emerging markets. josh didn't like the emerging market bonds but i think there is opportunity in select areas of emerging markets.
also, i think some of the social media, names like facebook, are going to have tremendous 2014. that's what i want to look at. >> dr. j. joining us up north. outlook for the market. are you positive? >> i'm very positive, judge. one of the sectors that i like a lot coming into this year is seeing all kinds of love today, and that's housing. josh talked about energy, that's doing well. but in particular, take a look at housing, masco, take a look at pulty, stocks in the space, d.r. horton, unusual activity, they're running right now. they're not just moving up slowly. these stocks are running. i think a lot of it is because they, again, squaunerred that rally that they had, when everybody panicked on rates pack in may. they basically sold off hard, got flat for the year, now they're starting to ramp into 2014. i think that's one of the sectors to watch in 2014.
>> kate moore, jpmorgan's private bank chief investment strategist live in the house. nice to see you again. you've heard what the traders have to say. does that pretty much work with your thought right now? >> it's very consistent with how we're seeing the world. josh you said something interesting, which was you don't want to necessarily chase the laggards because they're laggards, make sure they're high qualify. that's how we're thinking 2014. think about what companies, what stories, themes, can have legs and gradually recovering, pretty constructive growth environment. but that doesn't mean you just rotate into materials or resources or other laggards because they're cheaper and have underperformed the rest of the market. >> what areas do you think are going to outperform next year? >> we like tech, industrials, financials, parts of health care space despite the strong performance in 2013. we're looking for real cyclical leadership in 2014. but also, more differentiation between marks. we don't think it's going to be an easy market to just buy the
broad index and say we're able to print the same 20 plus, 25 plus returns that we had this year. we want to be more stock pickers, more conscious of our themes and industries that we have concentrated positions in, and be more selective. >> right now, so much of the earnings gains we've seen this year, so much of stock performance is predicated on this idea that 400 -- 480-something companies in the s&p 500 doing both a buy-back and dividend. >> right. >> if rates rise more than what's expected, will that activity moderate, and as a result, will we be seeing much less in terms of potential upside? >> one of the things that's made us feel comfortable about the cycle, companies did a better job in thinking about the debt and balance sheets they had in previous cycles. previously you had a 100-basis move and it would derail everybody's funding.
companies thought long term, locked in low rates and don't need to come to the market consistently because of high cash balances, strong balance sheets and really much more prudent measurement. >> when do we see business investment? that's got to be offset if you don't see buy-backs and dividends at rate we've been seeing this. >> this has been incredibly frustrating. if you asked me the beginning of the year, i exing more cap x and it didn't come through. thinking of december 2012, we have far fewer tail risks, far fewer policy concerns, and it feels like companies should be getting more confident. >> the trigger sentiment improvement. >> the trigger is sentiment improve, getting past the policy hurdles that have been a holdup for companies holding cash. >> japan a popular trade. is it a successful one again. >> we are constructive on japan, certainly first part of next year. we're skeptical of the third arrow and structural reforms.
in terms of monetary and fiscal stimulus are going to help the market move. we're at 104 on the yen now. if we get up to a 110 level, that's another important leg for earnings. on europe, expecting greater operational leverage in 2014 and double digit earnings. >> if we have a strong u.s. market, strong european market, shouldn't that, if nothing else, start to lift the emerging markets a little bit. >> certainly will help on the sentiment side. i think what a lot of emerging market skeptics are not thinking about if the u.s. and europe and japan deliver in terms of growth it will put a floor in terms of export demand, overall global activity, and that's going to allow a very strong story and countries with good current account surpluses and prudent management of exchange rates to perform well, regardless of whether or not the taper accelerates in 2014. we've haeeld on to it in china. >> what you said about the
foengs of t potential of the taper accelerate, is there a risk that the economy continues to perform to a level that people think it can, the stock market performs, and that becomes a negative? too good becomes too bad, it's going to hurt the stock market? >> we have a long way to go before strong economic activity becomes a real significant headwind for corporations and for investing in stocks. you know, even in our most bullish case scenario, we are still going to be seeing significant asset purchases throughout all of 2014. we're a couple years away from the fed quote/unquote normalizing policy until we're seeing a tightening in rates and we see businesses get affected by higher rates. we don't think we have to worry. it doesn't mean we're going to buy the whole market and not think twice. we want to be more differentiated but on balance, we think, equities and risk assets in good position in 2014. >> happy holidays. kate moore, thanks so much. see you in the new year. apple announcing a
much-anticipat much-anticipated deal with china mobile. josh lipton has the story. >> reporter: after years of negotiations, apple and china mobile finally get the deal done. apple saying it will offer the iphone on china mobile's network starting january 17th, and in a deal that could shake up the smartphone market in china. the largest mobile services provider, serving over 760 million customers. they've added 50 million this year. put differently, it has more than doubles the amount of customers in the entire american population. no information on what the iphone will cost with a china mobile contract just yet. but if apple prices phones in mid end range around 300 bucks it could take share from rivals like samsung and zte, according to the third quart, 89 million shart phones shipped in china. apple had 6% of the market.
whether the ceo tim cook would sacrifice margin for market share. analysts on the street, busy crunching numbers on what this deal could mean for apple's top line. gene munster says the deal could mean another 17 million more iphones sold in 2014 and 5% boost to revenue. >> i've seen a number as high as 20 million iphones added. anywhere from 4 to 8 a share to earning. second half story we've seen, which apple has largely been, just as pete najarian thought it might be, continues into 2014. that is the view on the desk? >> i believe so. apple had a huge run, up to a75 on the news that this china mobile deal was coming, sole off down to 540, now that it's out there analysts will start take up their numbers and that will apple up to 600. >> 5% number, in term of accretion, is only 2%, china mobile subscriber base and 10
mrs. of the high end of subscriber base. that seem to be conservative. i've seen numbers as high as 30 million. i think throughout the year we'll see revisions higher. >> dr. j., does this remove a roadblock to 600, if one even existed? >> yeah, certainly does, judge. how fast we get there, i mean, january 24th is a key date. you heard josh lipton say january 17th, that's when it goes on sale. we get the first week or estimates from a variety of sources for how it went in that first week. and obviously we'll know did they sacrifice margin. i personally don't think that tim cook's going to do that. if they hold margin and they get strong numbers that i also anticipate, i think the stock makes a strong move in the first quarter of 2014, and i don't know -- you can dismiss ntt docomo either, because that's huge and those numbers will start coming through as well. i think both of these drive the
stock significantly higher. >> josh, the buyback, what do you think? give me your best guess, what could happen with the buyback and icahn in 2014. >> we've known how much cash apple's holding for two years and it didn't put a floor under the stock. i don't think the buyback is driving things. i think that the stock is moving on fundamentals getting better and people being excited about the products, marketing campaign for christmas has been off the hook it went viral, rare for a company of this size to get that much buy-in from the consumers with one or two commercials. i think sentiment is driving the stock, not the buyback. we've had 100 billion plus in cash for years now. >> if in dough the buyback of 50 billion or whatever before, is that another catalyst positively for the stock? >> sure, it's great. the buyback's not a negative. the stock is moving largely not based on information that we've already had for years now. >> sure. >> i think people are into the
products. by the way, the itunes, as a store, is way, way, way undervalued relative to how much business they're doing for christmas and what the estimates could be for next year. itunes is a bigger component than people are given credit for. >> facebook making its debut on the s&p 500 in style. hitting an all-time high today. why its runs far from over. commodities. >> tell me just why you think the price of pork bellies is going down, william. >> it's christmastime. everybody's up tight. >> coming up after the break, talk to citi's head of commodities research about his favorite place for 2014. and with santa claus coming to town, mixing a little business with pleasure. brown foreman, the company behind jack daniels, southern comfort, talking holiday drinks and there may be taste testing going on.
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four trades on four stocks making big news. tiffany, luxury goods retailer, cutting outlook for a year, after a dutch court awarded $449 million in damages to swatch in a case involving a failed joint venture between the two companies. stephanie? >> all in, interest expense, et cetera, cost them $480 million. they've got it on cash on books
so they can pay it out. lowering numbers because of the situation, nothing to do with fundamentals. like the margin upside story here for 2014, commodity costs come down. price increases go up. and they have good products. >> micron? bank of america downgrading shares to underperform from neutral. analyst cutting his price target by$1. >> the analyst is missing the boat on micron and earnings protension for not only 2014 but 2015. this is one of my names for the play book playoffs. micron has more upside. they pulled back about a week ago, rallied up near 23. any pullback on micron into low 20s is a buying opportunity for next year. >> fda allow area to resume marking of the leukemia drug. clinical data showed complications. >> take a look at who's who of people upgrading today, too. take a look at jeffries,
everybody on the board upgraded price targets or take friend a hold to a buy here. buying upside calls. that continues. i think the stock works its way higher still into 2014. >> darden, josh, another activist calling for some action. >> yeah. this is the single, most, exciting stock in the restaurant sector going into 2014. 20 different ways to play out. barington wants them to take the business, polisplit in two, put olive garden and red lobster in a slow growth company reap the real estate and take longhorn, spin it off into something quicker, more nimble to grow. another activist, starboard saying, whatever they're planning to do is not enough. a lot of potential. >> we're watching it today. up 6%. commodities. coffee prices hitting a recent low, helping starbucks, duncan and green mountain.
how do you trade it now? kate kelly, live in rainy times square. no doubt having a cup of coffee or two. >> that's right. i have a duncan cup in the car and a starbucks behind me and mug from home. the story that is coffee has been on a big route this year, as you said. lowest low since 2006, down 20%. if you were short coffee, you probably did well. i'm told by professionals it's something you need to watch technicals on, it's volatile but a high value contract. so if you study the charts and supply, coming out of brazil, but also vietnam, you can win on that. star bucks, dunkin' and green mountain coffee on a tear. the question is, will that be sustained? well, some people think, yes. coffee may be at a low in term of the commodity price, and the increased margins that come from the cost savings. definitely help those brands. also of course factors like
same-store sales and expansion and among those, i say starbucks is probably the favorite. >> kate, thanks so much. stocks, of all three, have moved. kate kelly in times square. whether starbucks or dunkin' or green mountain, big years. >> i like starbucks. it never comes down enough. phenomenal year. i think that they have great not only products and brand knowledge, but also have margin upside as well. that's another part of the theme going forward. >> next, kb home moving higher on upgrade from citi. did the analysts get the call right? a bull and bear. we'll debate that next. who has a better job than this guy? there he is. chief entertainment officer tim laird is here, mixing up holiday spirits. find out why high-end is the rage in the bourbon space.
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our next guest says most commodities won't do much better in 2014. ed morris joins us now. welcome. why are commodities going to struggle yet again? >> well, basically, demand is likely to be weak, given the state of the global economy. and period of high prices led to an incredible, in fact, record amount of investment on the supply side. we have more supply across most commodity, and demand is not rising at the rate it was. >> i thought globally, things were getting better, right? feels as though things here in the u.s. are getting better, that europe is getting bet, china's not falling apart. >> china's not falling apart but the fact is, china growing at 7%, 7.5% is not like china growing at 10%, 12%. here we have the most significant commodity consumer in the world responsible for like half of the amount of thermal coal, half of the amount of copper consumed and you have that reduction in the growth
rate with the supply side trying to meet the surge in demand that was at a higher percentage level and the result is much more production capacity, much more inventories, and a weighing down on prices across most commodities. >> it's josh brown. last month australia reported record iron ore shipments into china. i'm curious, is that a dead cat bounce and it's bumping along the bottom, or are there signs in certain commodities demand might be picking up. >> certainly signs that in some commodities demand is picking up. the problem with iron ore, steel production in china forecast to go down, actually. and there are lots of inventories of iron ore in the market and production capacity brought on. we think the market's going to remain weak. pollution controls are shutting down, steel production at a rate that is considerably higher than anyone had forecast. we think that's going to come in for a rude awakening, as we
think copper will come in for a rude awakening. there are commodities that are really peering tight. palladium is our favorite. it's our favorite because there's a limited amount of supply. growing demand for catalyst use in refineries and auto automoti industry. and platinum is likely not to be far behind. we think whatever surplus there is in the market is likely to be drained, dry up, the time we get to 2015. so there are bright spots on the commodity horizon. >> what is your target for gold? so much pain this year. even more so lately. gold and silver, for that matter. what kind of gold target are we talking about? >> we're at the 1250 level for gold, about 22 for silver. gold is now ricking along at the marginal production costs, the
highest cost producing areas. part of what's happened to gold is the rand appreciation, with the rand appreciation, the cost of mining in south africa have, in dollar terms, gone down. we're right at that margin where mines are being shut, and we think there will be a bounce. part of that bounce is the demand on the central banking side. yes, investor demand is down, but central bank demand is up. and actually chinese demand may be up a lot more than anybody had forecast the data, or difficult to find. we think 1250 is a target price for 2014. that, by the way, is about $200 lower than the average price in 2013. >> right. good to have you on the show. happy holidays. take a look at kb homes, higher after citi upgraded from neutral to sell. did citi get it right? now the time to buy kb home? mike murphy, our bull. josh brown the bear. 1:30 on the clock.
murph? >> i haven't been long housing names in some time. i took a break from them in the third and fourth quarter of this year. but now look at what kb homes came out with last week, they announced earnings and top line number was strong. the bottom line number was a miss. but if you have to look into this ceo's comments i think that's where the key lies. he talks about the environment for next year being very strong. he talks about the amount of land that they've purchased that reasonable prices. the key being in the right areas. i think when you look at setup for not only kb but the home builders into the first half of next year, they have the wind at their back, what was holding them back, in my estimation, fear of the taper. now that's out of the way, i think they go higher. >> i don't mean to be a jerk. this stock -- >> go ahead. >> fundamentally, technically, there's nothing to like about it. i tried. let's take the fundamentals quickly. if you look at their last earnings report, there was some window dressing but once you dive into numbers you see that cancellations is a percentage of
gross orders up, you see that deliveries down 4%. you see the backlog about flat year-over-year. earnings were a miss. revenue a miss. talk about the technicals. this thing's trapping a three-point range all year, 16 major support. you do not want to be long the stock if it challenges that level again. if it breaks down, you can see 12 or 13 quickly. >> a technical -- if you want to talk technicals. >> trapped under 19. >> stock's up 7%, gets through 19, change your feeling on stock. >> today a muppet upgrade. it's the type of upgrade that allows institutions to get out of the stock. >> through 19 you call it a breakout, buy it. >> i wouldn't buy it fundamentally, it's still leaving much to be desired like every other public home builder besides kb home better. >> a muppet upgrade. >> we'll see. >> sell to neutral and the stock's up 4%? give me a break. >> sometimes -- >> it's up because the entire
space is moving higher. >> i buy neutral rating calls always. >> sometimes when you go -- analyst goes from sell to neutral, that's an inflection point because something has changes materially for them to get less negative. they may not call it a buy -- >> valuation is decent. >> no, it's 2.9 times, it's way too expensive to pay for a housing company that misses on gross margins and posted flat orders and having execution issues. they have good land -- >> i'm surrounded. i'm ready. >> i like housing, i like the suppliers better. >> murphy does his best work when his back's against the wall. >> tell us who you think won the debate. use #bull or #bear. we'll give you results as we always do at the end of the show. more activity in the housing space today. stock swami at it again, seeing movement in the sector that could impact a major home builder, that's next. christmas comes early for
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facebook soaring to new record high. up more than 100% in 2013. more room to run? that's the big question. we were looking at facebook and twitter, sub50. they have eclipsed that, now where? >> higher. facebook's just now scratching the surface on where they can go. really, it comes from ad dollars. big companies, madison avenue's going out, see what advertising on a platform like facebook has is going to do for them, add dollars, come in i expect a strong quarter. >> i wonder, josh, if they post a strong quarter, which backs up the move that they've had, and there's a ton of momentum behind the name, is it a sell on the news event because of the run the stocks had. >> i feel like a lot of excitement about the instream video yas but a lot of grumbling and that may not be a great
product once people realize it's added commercials to time line. that seems to be where the fundamental concern is. technically, the stock looks great. it's screaming higher. so i don't know which one weighs more on people's minds in the end. seems like a tug-of-war here. >> resident stock swami buying a home builder after spotting big call options volume. dr. j., what do you see and what are you buying? >> well, it feeds into the debate that murph had with josh, and people just love these home builders, citi, yeah, i agree with you, josh, that sort of a mealy mouth upgrade. i think they felt bad because the sector was running away from them. i think that's why citi went to neutral rather than straight out going to a buy on it. activity in toll brothers today, judge, five times normal. they're buying january 36 calls. they bought a block of 6500 of them, that's a big chunk for a sector. this is one of the top
performers, of course. now, given the run they've had in the last five days, up 13% on the year. i think they doubled that in 2014. i am all over this. but i'm long pulte and dr. horton as well because of the activity in the last few days. >> you want to take on toll? >> i like toll better. >> toll is best in breed. >> i agree. if i were to buy one, i'd be attracted to toll. i like their strategy. i like the parts of country they're doing business. it's a better pick. >> yeah, i like toll because of the high-end. i like the management very much, balance sheet, it is cheaper. i still like suppliers. look at the mismasco, it's starting to go. it's a laggard and it has more upside. >> general motors hitting an e all-time high. you have a real-time trade. >> we bought some today. the stock fell last week with the ford news. it's down 2% since that
announcement. i think a lot of the ford issues are ford-specific. they're going to see higher costs because they have to ramp out 16 new products next year. gm already has the products that they're launching out and it's in trucks and suvs. it's a richer mix. they're behind where ford was from this year. i think next year, ford -- that gm is going to take share from ford. they also have very good exposure to china, to europe, that's the part of the auto cycle i like. i think the u.s. auto cycle is interesting. but a lot has been played out. next year international, and i also think you're going it see a dividend increase. we're buying today. >> josh, the stock was poised for a big technical breakout. >> still think it is. nothing happened that changed my opinion on that. this is a $50 stock, masquerading as $40 stock. as they return capital to shareholders at a rate higher than ford, and as hedge funds continue to add to their position on the way up, this probably goes. >> a diamond play of york capital. >> it's a massive hedge fund
hole, it's like aig. the difference is, this moves, trades, a lot better. there's more upside here than that one. but they're all in the stock. >> it's cheaper than ford. even given -- even after the pullback, it's cheaper. >> no risk in the ceo switch? akerson's leaving. >> certainly, but there's more risk in ford ceo situation than in gm. there's -- the bench is pretty good. i think she's starting to focus on just the engineering side, the product side. they've got that in the bench. i think it's fine. >> right now, everyone's running to gm from ford and ford keeps getting hit, down in a strong market. i think if mulally leaves ford and they get the right person in there it's a catalyst. if becket's into the mid 14s -- >> that's a big move to the mid 140s. >> from 1530. >> percentage wise, yeah. >> doc? >> now that the government's lifted some of that overhang of stock in general motors, that stock trades higher.
but in the space, i still like volinkswagen the best. every one of their models coming out with hybrid in the next year. that's the catalyst for europe in particular. and that will play well here. >> still ahead on the half, retailers trying to lure in last-minute shoppers with deep discounts. but are these mark-downs a bad sign for the stocks. not only crunch time for retail, a big season for the spirits industry. chief entertaining officer at brown foreman will mix up cocktails and give his outlook. >> you are mixing some things up. >> it's the wapner wisdom. a smart cocktail. it's delicious. i know you like bourbon, i'm starting out with woodforde and in a rocks glass with ice. >> like that so far. can't wait to see what it ends up. talk to you soon. it's as simple as this.
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carda cardacar card. should banks be doing a better job? we'll ask and answer that one. back to you. >> you may want to join me here up by the wall, if if you have a free moment. bourbon is one of the fastest growing segments of the spirits business. outlook for 2014 is bright. tim laird the chief entertainment officer at brown foreman, also the author of the new book "that's entertaining" here mixing up drinks. happy holidays. >> happy holidays to you. you can bank on bourbon, it is booming globally. >> it's one of the great american spirits that people are after. >> where's the fastest growing market now? hedge fund guys on the show like bourbon, spirits, mario gabelli invests in the stocks for global growth. >> growth in europe and asia where they are looking for handcrafted, good, products. you see that along other beverage sectors like the beer
business, they're trading up you like manhattans. we see a resurgence of the classic cocktails like old fashioned and manhattans and that's driving it as well. >> a high-end story by many accounts as well, right? high-end revenues, 25% up this year. super premium revenues nearly dushled. >> yep. if you think about spirits, pete cut back on other things they see it as an affordable luxury, where i'm going to upgrade my spirit. not just a whiskey in the well but i'll call for a woodford reserve or super premium bourbon. we see that along all categories. people are treating themselves, they can spend more and enjoy it. >> how competitive between you and others trying to come out with more bourbons? >> there's a big room there. we treat ourselves as a bourbon family, if you will. we do compete, but the category is just huge. so i mean, there's room for all of us in that category. we see a bright future for all. >> what prices are we talking for a bottle of woodford and
hire end. >> $28 to $30 a bottle. one of the things, it's not an everyday but you can enjoy it, makes great manhattans. >> is this peak time of year for sales? >> it is. all -- what we call the october, november, december is really the time for all spirit companies. for champagne, about 30% of all of the champagne sales come in the month of december because everybody waits until the last minute to buy the bubbly for the new years. >> you're behind the korbel name as well. a couple of drinks. wapner's wisdom, sounds great. >> it is, a great cocktail. a lot of bourbon. i put in two ounces of woodford reserve. now a blue chip. i'm going to upgrade this cocktail. but instead of ginger ale, i'll use a ginger beer. a nice, sophisticated, spicy taste of ginger and a good squeeze of lime. you can be the judge.
>> i'll taste it. looks good. smells good. >> go easy. >> i know it's going to taste good. >> the trader tini. >> love this cocktail. we'll go with vodka, clear choice. about an ounce and a half of the finlandia vodka. that goes in. liven it up with cranberry juice, two ounces of that, ounce of lemonade, if you want, switch those up. boom. that goes in. and i know that a lot of traders like to sugarcoat things i have a sugarcoated glass. love that sound. >> universally loved sound. >> goes to my martini glass. >> that has stephanie link's name all over it. >> and rosemary. >> on that note, trade the stocks for me, steph. >> the one i like is diaggio,
stocks pulled back, lowered organic growth but it's industry best at 5%. margins have upside. the brands, global exposure, and the balance sheet, i think they'll continue to increase dividend. >> dr. j. >> i like brown-forman and beam. brown-forman has great winds as part of the distribution and the like the sonoma on that side. >> josh brown, do you have a pick. >> love conciliation brands, 70 bucks. earnings grow next year. gross margins, ridiculous, 50%. buy into beer brands and getting into other areas. that's a winner. >> murph? >> keep it simple, bud, stock looks like it's breaking out. pays a nice dividend. i think you're going to see the projections are for 2014, beer consumption to increase in a big way, not only here in the u.s. but globally. >> appreciate you coming in.
>> thank you, scott. enjoy your cocktail. >> i certainly will. >> cheers. >> tim laird, thanks so much. best to you guys at brown-forman. >> holiday cheer for retailers. what was the final weekend like in terms of sales and traffic? who are winners and losers? covering all of those things in "the half." ♪ [ engine revs ] ♪ ♪ [ male announcer ] the mercedes-benz winter event is back, with the perfect vehicle that's just right for you, no matter which list you're on. [ santa ] ho, ho, ho, ho!
where the freg has given people another full 24 hours to sign up for obama care the official deadline was today, but according to cms the organization inside the federal government that lace lays out the rules for obama care, they will allow people another 24 hours access to the obama care website at the federal level to allow folks who might be trying for a last-minute sign-up to have an additional period of time to make sure that health care coverage does, in fact, go into effect by january 1st. this is a little last-minute slippage by the obama administration. they say this is all designed to make sure that last crush of people who waited until the last minute have an extra amount of time to make sure all the health plans go through as of january 1st as they promised. >> eamon javers down for us in d.c. just two days left before christmas the mad dash is on for last-minute shoppers and retailers luring them in with deep discounts. early numbers show sales are
looking weak despite those deals. zero in, target, you know about the debit card security issue by now. doc, what do you do here? this could hurt for a while? >> yeah. i don't think this is just a very short-term deal, judge, and i think it's going to hurt margins. they had to offer and i think they were wise to do it, a 10% discount for saturday and sunday shoppers to try to amealate some of the problems but i don't think it will. i think people will stay away from target for a while. i'm hearing a lot of credit cards there being canceled. we'll see exactly how it plays out but i would stay away from target. >> josh, sorry about that, doc, i was shocked when i saw on twitter this morning that abercrombie & fitch has 50% off their entire store. we have a shot of the home page i looked at there. 50% off everything. >> they need ron johnson. listen, there's nothing i can say about abercrombie. it can turn around but it's too early in the disaster phase.
close 35% of their stores by next year. serious management problems. and frankly, if you look at like the technical setup for this, $30 has been the line in the sand for almost two years. it's bounced sharply off of 30. if it fails at 30 this thing is in big trouble from a tactical standpoint. so it's tough, man. it's the worst performer in the s&p but things can get even worse in 2014 before they get better. >> switch gears to a retailer that has done well, kors falling after an analyst note warned of slower than expected sales. most on this desk have been extraordinarily positive. >> i'm not just because of valuation. it's a great company, great products, fabulous management team, good balance sheet. i could go on and on. it's had a nice run, 25 times forward estimates and just a slight little hiccup in sales or the slight little rumor or speculation that comps aren't as strong and you can see the stock is down 4%. i've gone the other way to coach
and that's been a real contrarian play in the low 50s. i think the expectations are washed out and i like that 2014 story. that's the one i would be buying. >> josh, you want to debate that? you take the other side. >> i'm long kors probably $100 stock by the end of next year. it's volatile and to stephanie's point a lot of good news priced in here but i do believe that there's another leg higher in the growth story. they really have barely done any penetration in europe. and i think there's a lot more they can be doing as they get into other lines of business, not just the key accessories which is really on fire and women's clothing. i like the stock. i think it's going higher. it could totally pull back into the 70s though. >> murph, one for coach, kors. >> i'm with stef. i think kors so much of the good news is priced in here, a couple hiccups josh will be buying it in the 70s. >> you're thinking about your next debate, that's what this is about. >> i like stef to debate with. >> final trades are up next.
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tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading. welcome back. we have countsed the results as we look at the market, take a look at the market first. there's the dow, a gain of 83 points. the s&p by the way is on pace for its best year since 1997. it's been a great year for the market. >> i'll toast to that. >> talk about the results of our debate. you said josh the bear won the debate on kb home. >> well done. >> josh, congrats there. final trades. >> buy twi. >> stephanie. >> eastman chemical. >> dr. j. >> hero, i'm buying that one today. >> josh brown. >> i like gm. i think it goes higher. >> the santa claus rally, technically is supposed to start tomorrow, runs for the last five days of the year and continues in the first two. think we're going to get it or get some of it last week? >> got some of it last week but
it continues. >> stef, what do you think here? we had this nice pop after the fed now what? >> volume will taper off but we work higher. >> i think it's going it to be happy holidays and people will finish out strongly this year. >> we will toast to a great year in the market and toast to all of you, of course. have great holiday. >> cheers. >> "power lunch" starts now. >> "halftime" is over, "power lunch" and the second half of the trading day starts right now. >> i am telling you those final trades get a lot better when you've got some bourbon behind them. when it comes to credit card security is this really the best we can do? 40 million cards swiped. how is europe better at this then we are? what would it cost to make shopping safe? do retailers an banks believe they're better off with a crisis every now and then rather than spending in the money to fix the problem. a new slate of record highs in the markets, ladies and gentlemen. the dow and s&p and nasdaq -- the dow and